HBA-ATS, NLM H.B. 2284 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2284
By: Averitt
Financial Institutions
6/7/1999
Enrolled



BACKGROUND AND PURPOSE 

Article 21.57 (Withdrawals for Premium Payments, Prohibited Practices),
Insurance Code, requires an insurance company to give a 30-day advance
notice of a proposed increase in premiums if the insurer withdraws the
premiums from a traditional bank account. An insurer is required to provide
consumers of traditional accounts with a prepaid postage form with which
the consumer may dispute the increase.  The consumer must provide the
insurer with any disputes within five days of  the effective date of the
proposed premium increase.  Prior to the 76th Legislature, premiums
withdrawn from escrow accounts, as opposed to traditional bank accounts,
were subject to a 60-day notification from the insurer.  Escrow account
holders were required to dispute a premium increase within 30 days of the
effective date. 

H.B. 2284 subjects escrow accounts to the same timetable as a traditional
bank account regarding insurer notification and consumer disputes for
proposed premium increases by repealing Article 21.57(d), which stated that
for the purposes of a policy insuring property under a deed of trust with
premiums paid from an escrow account, notification by the insurer was
prohibited from being later than the 60th day before the effective date of
the increase in premium, and written objection to the increase was to be
provided at least 30 days before the date the increase took effect. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Article 21.57(b), Insurance Code, to subject a person's
escrow account to the existing provisions of this section, regarding
automatic premium payments to an insurer through withdrawal of funds from
the account. 

SECTION 2.  Repealer: Article 21.57(d).  Subsection (d) states that for the
purposes of a policy insuring property under a deed of trust with premiums
paid from an escrow account, notification by the insurer may not be later
than the 60th day before the effective date of the increase in premium, and
written objection to the increase must be at least 30 days before the date
the increase takes effect. 

SECTION 3.  Effective date: September 1, 1999.

SECTION 4.  Emergency clause.